Disentangling the effects of household financial constraints and risk profile on mortgage rates
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- 2016 Disentangling the effecs of houshold
Accepted author manuscript, 634 KB, PDF document
DOI
In this paper we disentangle the impact of household financial constraints on mortgage rate from a number of dimensions of credit risk. This analysis relies on a dataset that contains information on the economic and financial decisions of Spanish households in four different years: 2002, 2005, 2008, and 2011. Our results suggest that banks’ profitable customers are able to bargain for lower mortgage rates. However, contrary to other studies, the risk profile does not have a significant effect on mortgage rates. Credit institutions tend to charge higher rates during the crisis to all customers, irrespective of their risk profiles.
Keywords
- Households, Mortgages, Financial constraints, Credit risk
| Original language | English |
|---|---|
| Pages (from-to) | 76-100 |
| Number of pages | 25 |
| Journal | The Journal of Real Estate Finance and Economics |
| Volume | 56 |
| Issue number | 1 |
| Early online date | 19 Dec 2016 |
| DOIs | |
| Publication status | Published - Jan 2018 |
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